LOANS AND ALLOWANCE FOR LOAN LOSSES

12 Months Ended

Dec. 31, 2020

Receivables [Abstract]

LOANS AND ALLOWANCE FOR LOAN LOSSES

LOANS AND ALLOWANCE FOR CREDIT LOSSES

Loans

Loans are stated at amortized cost. Balances within the major loans receivable categories are presented in the following table.

	December 31,
(dollars in thousands)	2020		2019
Commercial, financial and agricultural	$	1,627,477	$	802,171
Consumer installment	306,995		498,577
Indirect automobile	580,083		1,061,824
Mortgage warehouse	916,353		526,369
Municipal	659,403		564,304
Premium finance	687,841		654,669
Real estate – construction and development	1,606,710		1,549,062
Real estate – commercial and farmland	5,300,006		4,353,039
Real estate – residential	2,796,057		2,808,461
	$	14,480,925	$	12,818,476

Included in commercial, financial and agricultural loans at December 31, 2020 above is $827.4 million related to PPP loans.

Nonaccrual and Past Due Loans

A loan is placed on nonaccrual status when, in management’s judgment, the collection of the interest income appears doubtful. Interest receivable that has been accrued and is subsequently determined to have doubtful collectability is charged to interest income. Interest on loans that are classified as nonaccrual is subsequently applied to principal until the loans are returned to accrual status. The Company’s loan policy states that a nonaccrual loan may be returned to accrual status when (i) none of its principal and interest is due and unpaid, and the Company expects repayment of the remaining contractual principal and interest, or (ii) it otherwise becomes well secured and in the process of collection. Restoration to accrual status on any given loan must be supported by a well-documented credit evaluation of the borrower’s financial condition and the prospects for full repayment, approved by the Company’s Chief Credit Officer. Past due loans are loans whose principal or interest is past due 30 days or more. In some cases, where borrowers are experiencing financial difficulties, loans may be restructured to provide terms significantly different from the original contractual terms.

The following table presents an analysis of loans accounted for on a nonaccrual basis:

	December 31,
(dollars in thousands)	2020		2019
Commercial, financial and agricultural	$	9,836	$	9,236
Consumer installment	709		831
Indirect automobile	2,831		1,746
Premium finance	—		600
Real estate – construction and development	5,407		1,988
Real estate – commercial and farmland	18,517		23,797
Real estate – residential	39,157		36,926
	$	76,457	$	75,124

There was no interest income recognized on nonaccrual loans during the year ended December 31, 2020.

The following table presents an analysis of nonaccrual loans with no related allowance for credit losses:

(dollars in thousands)	December 31, 2020
Commercial, financial and agricultural	$	764
Real estate – construction and development	416
Real estate – commercial and farmland	7,015
Real estate – residential	5,299
	$	13,494

The following tables present an analysis of past-due loans as of December 31, 2020 and 2019:

(dollars in thousands)	Loans 30-59 Days Past Due		Loans 60-89 Days Past Due		Loans 90 or More Days Past Due		Total Loans Past Due		Current Loans		Total Loans		Loans 90 Days or More Past Due and Still Accruing
December 31, 2020
Commercial, financial and agricultural	$	4,576	$	2,018	$	5,652	$	12,246	$	1,615,231	$	1,627,477	$	—
Consumer installment	2,189		1,114		2,318		5,621		301,374		306,995		1,755
Indirect automobile	3,293		1,006		2,171		6,470		573,613		580,083		—
Mortgage warehouse	—		—		—		—		916,353		916,353		—
Municipal	—		—		—		—		659,403		659,403		—
Premium finance	7,188		3,895		6,571		17,654		670,187		687,841		6,571
Real estate – construction and development	13,348		723		5,150		19,221		1,587,489		1,606,710		—
Real estate – commercial and farmland	5,370		1,701		8,651		15,722		5,284,284		5,300,006		—
Real estate – residential	20,519		3,125		34,081		57,725		2,738,332		2,796,057		—
Total	$	56,483	$	13,582	$	64,594	$	134,659	$	14,346,266	$	14,480,925	$	8,326

(dollars in thousands)	Loans 30-59 Days Past Due		Loans 60-89 Days Past Due		Loans 90 or More Days Past Due		Total Loans Past Due		Current Loans		Total Loans		Loans 90 Days or More Past Due and Still Accruing
December 31, 2019
Commercial, financial and agricultural	$	3,609	$	2,251	$	6,484	$	12,344	$	789,827	$	802,171	$	—
Consumer installment	3,488		1,336		1,452		6,276		492,301		498,577		922
Indirect automobile	5,978		1,067		1,522		8,567		1,053,257		1,061,824		21
Mortgage warehouse	—		—		—		—		526,369		526,369		—
Municipal	—		—		—		—		564,304		564,304		—
Premium finance	13,801		8,022		5,411		27,234		627,435		654,669		4,811
Real estate – construction and development	7,785		1,224		1,583		10,592		1,538,470		1,549,062		—
Real estate – commercial and farmland	7,404		3,405		15,598		26,407		4,326,632		4,353,039		—
Real estate – residential	46,226		15,277		31,083		92,586		2,715,875		2,808,461		—
Total	$	88,291	$	32,582	$	63,133	$	184,006	$	12,634,470	$	12,818,476	$	5,754

Collateral-Dependent Loans

Collateral-dependent loans are loans where repayment is expected to be provided substantially through the operation or sale of the collateral when the borrower is experiencing financial difficulty. If the Company determines that foreclosure is probable, these loans are written down to the lower of cost or collateral value less estimated costs to sell. When repayment is expected to be from the operation of the collateral, the allowance for credit losses is calculated as the amount by which the amortized cost basis of the financial asset exceeds the present value of expected cash flows from the operation of the collateral. The Company may, in the alternative, measure the allowance for credit loss as the amount by which the amortized cost basis of the financial asset exceeded the estimated fair value of the collateral. As of December 31, 2020, there were $123.1 million of collateral-dependent loans which are primarily secured by real estate, equipment and receivables.

The following table presents an analysis of collateral-dependent financial assets and related allowance for credit losses:

(dollars in thousands)	December 31, 2020
	Balance		Allowance for Credit Losses
Commercial, financial and agricultural	$	5,490	$	2,252
Premium finance	3,523		—
Real estate – construction and development	4,173		512
Real estate – commercial and farmland	100,180		21,001
Real estate – residential	9,716		891
	$	123,082	$	24,656

Impaired Loans

Prior to the adoption of ASU 2016-13, loans were considered impaired when, based on current information and events, it was probable the Company would be unable to collect all amounts due in accordance with the original contractual terms of the loan agreements. Impaired loans include loans on nonaccrual status and accruing troubled debt restructurings. When determining if the Company would be unable to collect all principal and interest payments due in accordance with the contractual terms of the loan agreement, the Company considered the borrower’s capacity to pay, which included such factors as the borrower’s current financial statements, an analysis of global cash flow sufficient to pay all debt obligations and an evaluation of secondary sources of repayment, such as guarantor support and collateral value. The Company individually assessed for impairment all nonaccrual loans greater than $100,000 and all troubled debt restructurings greater than $100,000 (including all troubled debt

restructurings, whether or not currently classified as such). The tables below include all loans deemed impaired, whether or not individually assessed for impairment. If a loan was deemed impaired, a specific valuation allowance was allocated, if necessary, so that the loan was reported net, at the present value of estimated future cash flows using the loan’s existing rate or at the fair value of collateral if repayment was expected solely from the collateral. Interest payments on impaired loans were typically applied to principal unless collectability of the principal amount was reasonably assured, in which case interest was recognized on a cash basis.

The following is a summary of information pertaining to impaired loans: 

	As of and for the Years Ended December 31,
(dollars in thousands)	2019		2018
Nonaccrual loans	$	75,124	$	42,058
Troubled debt restructurings not included above	29,609		28,063
Total impaired loans	$	104,733	$	70,121
Interest income recognized on impaired loans	$	4,131	$	3,030
Foregone interest income on impaired loans	$	4,100	$	2,336

The following table present an analysis of information pertaining to impaired loans as of December 31, 2019.

(dollars in thousands)	Unpaid Contractual Principal Balance		Recorded Investment With No Allowance		Recorded Investment With Allowance		Total Recorded Investment		Related Allowance		Average Recorded Investment
December 31, 2019
Commercial, financial and agricultural	$	18,438	$	1,911	$	7,840	$	9,751	$	1,542	$	6,287
Consumer installment	2,179		839		—		839		—		767
Indirect automobile	1,845		1,746		—		1,746		—		592
Premium finance	757		—		757		757		156		524
Real estate – construction and development	4,893		1,319		1,605		2,924		204		7,278
Real estate – commercial and farmland	42,515		12,147		18,381		30,528		953		23,280
Real estate – residential	62,675		13,413		44,775		58,188		3,592		51,817
Total	$	133,302	$	31,375	$	73,358	$	104,733	$	6,447	$	90,545

Credit Quality Indicators

The Company uses a nine category risk grading system to assign a risk grade to each loan in the portfolio. The following is a description of the general characteristics of the grades:

Grade 1 – Prime Credit – This grade represents loans to the Company’s most creditworthy borrowers or loans that are secured by cash or cash equivalents.

Grade 2 – Strong Credit – This grade includes loans that exhibit one or more characteristics better than that of a Good Credit. Generally, the debt service coverage and borrower’s liquidity is materially better than required by the Company’s loan policy.

Grade 3 – Good Credit – This grade is assigned to loans to borrowers who exhibit satisfactory credit histories, contain acceptable loan structures and demonstrate ability to repay.

Grade 4 – Satisfactory Credit – This grade includes loans which exhibit all the characteristics of a Good Credit, but warrant more than normal level of banker supervision due to (i) circumstances which elevate the risks of performance (such as start-up operations, untested management, heavy leverage and interim losses); (ii) adverse, extraordinary events that have affected, or could affect, the borrower’s cash flow, financial condition, ability to continue operating profitability or refinancing (such as death of principal, fire and divorce); (iii) loans that require more than the normal servicing requirements (such as any type of construction financing, acquisition and development loans, accounts receivable or inventory loans and floor plan loans); (iv) existing technical exceptions which raise some doubts about the Bank’s perfection in its collateral position or the continued financial capacity of the borrower; or (v) improvements in formerly criticized borrowers, which may warrant banker supervision.

Grade 5 – Fair Credit – This grade is assigned to loans that are currently performing and supported by adequate financial information that reflects repayment capacity but exhibits a loan-to-value ratio greater than 110%, based on a documented collateral valuation.

Grade 6 – Other Assets Especially Mentioned – This grade includes loans that exhibit potential weaknesses that deserve management’s close attention. If left uncorrected, these weaknesses may result in deterioration of the repayment prospects for the asset or in the Company’s credit position at some future date.

Grade 7 – Substandard – This grade represents loans which are inadequately protected by the current credit worthiness and paying capacity of the borrower or of the collateral pledged, if any. These assets exhibit a well-defined weakness or are characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected. These weaknesses may be characterized by past due performance, operating losses or questionable collateral values.

Grade 8 – Doubtful – This grade includes loans which exhibit all of the characteristics of a substandard loan with the added provision that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable or improbable.

Grade 9 – Loss – This grade is assigned to loans which are considered uncollectible and of such little value that their continuance as active assets of the Bank is not warranted. This classification does not mean that the loan has absolutely no recovery or salvage value, but rather it is not practical or desirable to defer writing it off.

The following table presents the loan portfolio's amortized cost by class of financing receivable, risk grade and year of origination (in thousands). Generally, current period renewals of credit are underwritten again at the point of renewal and considered current period originations for purposes of the table below. The Company had an immaterial amount of revolving loans which converted to term loans and the amortized cost basis of those loans is included in the applicable origination year. There were no loans risk graded 9 at December 31, 2020.

	Term Loans by Origination Year												Revolving Loans Amortized Cost Basis		Total
As of December 31, 2020	2020		2019		2018		2017		2016		Prior
Commercial, Financial and Agricultural
Risk Grade:
1	$	829,710	$	2,912	$	1,055	$	387	$	490	$	4,961	$	36,373	$	875,888
2	1,213		1,512		668		996		172		967		14,317		19,845
3	109,352		54,266		16,932		17,968		7,027		3,905		68,806		278,256
4	86,837		71,645		74,388		37,779		15,359		23,069		85,366		394,443
5	4,061		4,269		4,772		7,443		804		5,842		4,352		31,543
6	21		72		506		193		3,509		1,232		632		6,165
7	3,312		3,460		2,579		3,573		1,294		5,214		1,886		21,318
8	—		—		—		—		—		—		19		19
Total commercial, financial and agricultural	$	1,034,506	$	138,136	$	100,900	$	68,339	$	28,655	$	45,190	$	211,751	$	1,627,477
Consumer Installment
Risk Grade:
1	$	6,782	$	3,001	$	1,550	$	583	$	95	$	1	$	667	$	12,679
2	—		—		46		2		—		63		42		153
3	15,172		6,960		2,838		887		1,455		601		4,389		32,302
4	120,800		53,593		53,182		16,329		3,121		9,437		3,556		260,018
5	49		127		28		30		3		242		8		487
6	—		2		9		—		—		145		—		156
7	30		209		72		105		134		553		97		1,200
Total consumer installment	$	142,833	$	63,892	$	57,725	$	17,936	$	4,808	$	11,042	$	8,759	$	306,995
Indirect Automobile
Risk Grade:
1	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
2	—		—		81		31		5,356		3,054		—		8,522
3	—		35,432		187,656		188,302		103,570		52,781		—		567,741
4	—		—		—		—		—		—		—		—
5	—		—		—		—		—		—		—		—
6	—		—		57		70		62		85		—		274
7	—		163		519		561		1,078		1,225		—		3,546
Total indirect automobile	$	—	$	35,595	$	188,313	$	188,964	$	110,066	$	57,145	$	—	$	580,083
Mortgage Warehouse
Risk Grade:
3	$	—	$	—	$	—	$	—	$	—	$	—	$	916,353	$	916,353
Total mortgage warehouse	$	—	$	—	$	—	$	—	$	—	$	—	$	916,353	$	916,353
Municipal
Risk Grade:
1	$	91,692	$	12,685	$	8,944	$	143,741	$	124,929	$	97,923	$	—	$	479,914
2	73,000		—		—		—		9,410		—		—		82,410
3	39,990		713		—		5,453		7,204		5,489		—		58,849
4	31,394		—		—		—		—		6,836		—		38,230
Total municipal	$	236,076	$	13,398	$	8,944	$	149,194	$	141,543	$	110,248	$	—	$	659,403

	Term Loans by Origination Year												Revolving Loans Amortized Cost Basis		Total
As of December 31, 2020	2020		2019		2018		2017		2016		Prior
Premium Finance
Risk Grade:
2	$	661,614	$	18,236	$	515	$	746	$	121	$	38	$	—	$	681,270
7	5,811		760		—		—		—		—		—		6,571
Total premium finance	$	667,425	$	18,996	$	515	$	746	$	121	$	38	$	—	$	687,841
Real Estate – Construction and Development
Risk Grade:
3	$	59,325	$	7,035	$	6,870	$	8,046	$	3,415	$	6,916	$	1,293	$	92,900
4	605,254		445,496		205,444		50,181		14,672		26,915		68,574		1,416,536
5	1,614		26,720		9,612		13,261		17,712		10,127		107		79,153
6	685		1,036		3,646		1,302		—		4,564		—		11,233
7	15		2,858		566		271		42		3,136		—		6,888
Total real estate – construction and development	$	666,893	$	483,145	$	226,138	$	73,061	$	35,841	$	51,658	$	69,974	$	1,606,710
Real Estate – Commercial and Farmland
Risk Grade:
1	$	—	$	—	$	161	$	—	$	—	$	—	$	—	$	161
2	7,482		540		521		2,131		4,375		10,663		1,138		26,850
3	918,939		370,703		143,591		197,942		224,712		274,665		67,067		2,197,619
4	344,777		584,814		423,241		331,024		242,573		545,745		34,326		2,506,500
5	4,027		39,216		69,173		80,726		25,561		94,461		1,274		314,438
6	—		10,680		4,895		28,139		7,670		31,224		—		82,608
7	250		54,439		18,574		15,489		27,044		55,763		271		171,830
Total real estate – commercial and farmland	$	1,275,475	$	1,060,392	$	660,156	$	655,451	$	531,935	$	1,012,521	$	104,076	$	5,300,006
Real Estate - Residential
Risk Grade:
1	$	—	$	—	$	—	$	—	$	—	$	19	$	—	$	19
2	37		398		12		121		1,275		47,286		1,402		50,531
3	763,101		529,268		254,632		186,531		154,285		388,825		203,491		2,480,133
4	19,296		19,874		15,784		11,607		14,240		53,869		44,276		178,946
5	400		1,768		3,489		3,479		1,151		12,824		3,618		26,729
6	527		1,843		1,030		334		724		3,391		255		8,104
7	3,442		9,387		12,339		4,667		2,157		16,659		2,944		51,595
Total real estate - residential	$	786,803	$	562,538	$	287,286	$	206,739	$	173,832	$	522,873	$	255,986	$	2,796,057

The following table presents the loan portfolio by risk grade as of December 31, 2019 (in thousands).

Risk Grade	Commercial, Financial and Agricultural		Consumer Installment		Indirect Automobile		Mortgage Warehouse		Municipal		Premium Finance		Real Estate - Construction and Development		Real Estate - Commercial and Farmland		Real Estate - Residential		Total
1	$	22,396	$	13,184	$	—	$	—	$	552,062	$	—	$	—	$	208	$	27	$	587,877
2	18,937		1,233		18,354		—		2,690		654,069		17,535		35,299		92,255		840,372
3	215,180		33,314		1,033,861		526,369		8,925		—		90,124		1,720,039		2,406,587		6,034,399
4	482,146		449,224		4,009		—		627		—		1,377,674		2,348,083		222,779		4,884,542
5	33,317		208		—		—		—		—		41,759		133,119		24,618		233,021
6	4,901		213		—		—		—		—		17,223		53,941		10,132		86,410
7	25,294		1,191		5,600		—		—		600		4,747		62,350		52,063		151,845
8	—		8		—		—		—		—		—		—		—		8
9	—		2		—		—		—		—		—		—		—		2
Total	$	802,171	$	498,577	$	1,061,824	$	526,369	$	564,304	$	654,669	$	1,549,062	$	4,353,039	$	2,808,461	$	12,818,476

Troubled Debt Restructurings

The restructuring of a loan is considered a “troubled debt restructuring” if both (i) the borrower is experiencing financial difficulties and (ii) the Company has granted a concession. Concessions may include interest rate reductions to below market interest rates, principal forgiveness, restructuring amortization schedules and other actions intended to minimize potential losses. The Company has exhibited the greatest success for rehabilitation of the loan by a reduction in the rate alone (maintaining the amortization of the debt) or a combination of a rate reduction and the forbearance of previously past due interest or principal. This has most typically been evidenced in certain commercial real estate loans whereby a disruption in the borrower’s cash flow resulted in an extended past due status, of which the borrower was unable to catch up completely as the cash flow of the property ultimately stabilized at a level lower than its original level. A reduction in rate, coupled with a forbearance of unpaid principal and/or interest, allowed the net cash flows to service the debt under the modified terms.

The Company’s policy requires a restructure request to be supported by a current, well-documented credit evaluation of the borrower’s financial condition and a collateral evaluation that is no older than six months from the date of the restructure. Key factors of that evaluation include the documentation of current, recurring cash flows, support provided by the guarantor(s) and the current valuation of the collateral. If the appraisal in file is older than six months, an evaluation must be made as to the continued reasonableness of the valuation. For certain income-producing properties, current rent rolls and/or other income information can be utilized to support the appraisal valuation, when coupled with documented cap rates within our markets and a physical inspection of the collateral to validate the current condition.

The Company’s policy states in the event a loan has been identified as a troubled debt restructuring, it should be assigned a grade of substandard until such time that the borrower has demonstrated the ability to service the loan payments based on the restructured terms – generally defined as six months of satisfactory payment history. Missed payments under the original loan terms are not considered under the new structure; however, subsequent missed payments are considered non-performance and are not considered toward the six month required term of satisfactory payment history.

In the normal course of business, the Company renews loans with a modification of the interest rate or terms that are not deemed as troubled debt restructurings because the borrower is not experiencing financial difficulty. The Company modified loans in 2020 and 2019 totaling $436.0 million and $325.7 million, respectively, under such parameters. These totals do not include modifications under our disaster relief program discussed under the heading "COVID-19 Deferrals" below.

As of December 31, 2020 and 2019, the Company had a balance of $85.0 million and $35.2 million, respectively, in troubled debt restructurings. The Company has recorded $1.2 million and $1.9 million in previous charge-offs on such loans at December 31, 2020 and 2019, respectively. The Company’s balance in the allowance for credit losses allocated to such troubled debt restructurings was $13.0 million and $3.7 million at December 31, 2020 and 2019, respectively. At December 31, 2020, the Company did not have any commitments to lend additional funds to debtors whose terms have been modified in troubled restructurings.

During the year ending December 31, 2020 and 2019, the Company modified loans as troubled debt restructurings, with principal balances of $49.4 million and $8.5 million, respectively, and these modifications did not have a material impact on the Company's allowance for credit losses. These modifications do not include modifications for which the Company applied the

temporary relief under Section 4013 of the CARES Act. The following table presents the loans by class modified as troubled debt restructurings, which occurred during the year ending December 31, 2020 and 2019.

	December 31, 2020			December 31, 2019
Loan Class	#	Balance (in thousands)		#	Balance (in thousands)
Commercial, financial and agricultural	7	$	855	4	$	627
Consumer installment	5	15		10	58
Indirect automobile	488	2,738		—	—
Premium finance	—	—		1	157
Real estate – construction and development	1	17		—	—
Real estate – commercial and farmland	14	31,630		2	220
Real estate – residential	55	14,126		48	7,442
Total	570	$	49,381	65	$	8,504

Troubled debt restructurings with an outstanding balance of $4.4 million and $4.2 million defaulted during the year ended December 31, 2020 and 2019, respectively, and these defaults did not have a material impact on the Company’s allowance for credit losses. The following table presents the troubled debt restructurings by class that defaulted (defined as 30 days past due) during the year ending December 31, 2020 and 2019.

	December 31, 2020			December 31, 2019
Loan Class	#	Balance (in thousands)		#	Balance (in thousands)
Commercial, financial and agricultural	1	$	2	6	$	87
Consumer installment	4	2		5	32
Real estate – construction and development	3	689		1	2
Real estate – commercial and farmland	4	929		5	1,942
Real estate – residential	22	2,756		23	2,130
Total	34	$	4,378	40	$	4,193

The following tables present the amount of troubled debt restructurings by loan class classified separately as accrual and non-accrual at December 31, 2020 and 2019.

As of December 31, 2020	Accruing Loans			Non-Accruing Loans
Loan Class	#	Balance (in thousands)		#	Balance (in thousands)
Commercial, financial and agricultural	9	$	521	11	$	849
Consumer installment	10	32		20	56
Indirect automobile	437	2,277		51	461
Real estate – construction and development	4	506		5	707
Real estate – commercial and farmland	28	36,707		7	1,401
Real estate – residential	264	38,800		34	2,671
Total	752	$	78,843	128	$	6,145

As of December 31, 2019	Accruing Loans			Non-Accruing Loans
Loan Class	#	Balance (in thousands)		#	Balance (in thousands)
Commercial, financial and agricultural	5	$	516	17	$	335
Consumer installment	4	8		27	107
Premium finance	1	156		—	—
Real estate – construction and development	6	936		3	253
Real estate – commercial and farmland	21	6,732		8	2,071
Real estate – residential	197	21,261		40	2,857
Total	234	$	29,609	95	$	5,623

COVID-19 Deferrals

In response to the COVID-19 pandemic, the Company offered affected borrowers payment relief under its Disaster Relief Program. These modifications primarily consisted of short-term payment deferrals or interest-only periods to assist customers. The Company has begun providing payment modifications to certain borrowers in economically sensitive industries of various terms up to nine months. Modifications related to the COVID-19 pandemic and qualifying under the provisions of Section 4013 of the CARES Act are not deemed to be troubled debt restructurings. As of December 31, 2020, $332.8 million in loans remained in payment deferral related to COVID-19 pandemic Disaster Relief Program.

The table below presents short-term deferrals related to the COVID-19 pandemic that were not considered TDRs.

(dollars in thousands)	COVID-19 Deferrals		Deferrals as a % of total loans
Commercial, financial and agricultural	$	12,471	0.8	%
Consumer installment	1,418		0.5	%
Indirect automobile	8,936		1.5	%
Real estate – construction and development	11,049		0.7	%
Real estate – commercial and farmland	179,183		3.4	%
Real estate – residential	119,722		4.3	%
	$	332,779	2.3	%

Related Party Loans

In the ordinary course of business, the Company has granted loans to certain executive officers, directors and their affiliates. These loans are made on substantially the same terms as those prevailing at the time for comparable transaction and do not involve more than normal credit risk. Changes in related party loans are summarized as follows:

	December 31,
(dollars in thousands)	2020		2019
Balance, January 1	$	36,468	$	3,072
Advances	34,132		8,938
Repayments	(1,205)		(2,554)
Transactions due to changes in related parties	—		27,012
Ending balance	$	69,395	$	36,468

Allowance for Credit Losses

The allowance for credit losses represents an allowance for expected losses over the remaining contractual life of the assets. The contractual term does not consider extensions, renewals or modifications unless the Company reasonably expects to execute a troubled debt restructuring with a borrower. The Company segregates the loan portfolio by type of loan and utilizes this segregation in evaluating exposure to risks within the portfolio.

Loan losses are charged against the allowance when management believes the collection of a loan’s principal is unlikely. Subsequent recoveries are credited to the allowance. Consumer loans are charged off in accordance with the Federal Financial Institutions Examination Council’s (“FFIEC”) Uniform Retail Credit Classification and Account Management Policy. Commercial loans are charged off when they are deemed uncollectible, which usually involves a triggering event within the collection effort. If the loan is collateral dependent and foreclosure is probable, the loss is more easily identified and is charged off when it is identified, usually based upon receipt of an appraisal. However, when a loan has guarantor support, the Company may carry the estimated loss as a reserve against the loan while collection efforts with the guarantor are pursued. If, after collection efforts with the guarantor are complete, the deficiency is still considered uncollectible, the loss is charged off and any further collections are treated as recoveries. In all situations, when a loan is downgraded to an Asset Quality Rating of 9 (Loss per the regulatory guidance), the uncollectible portion is charged off.

During the year ended December 31, 2020, the allowance for credit losses increased primarily due to deterioration in forecasted macroeconomic factors resulting from the COVID-19 pandemic. The allowance for credit losses was determined at December 31, 2020 using the Moody's baseline economic forecast, which Moody's defines as having a 50% probability that the

economy will perform than the baseline projection and the same probability it will perform worse. The current forecast reflects, among other things, a decline in GDP and elevated unemployment levels compared to the forecast the time of adoption of ASC 326 on January 1, 2020. The current forecast also includes an expected improvement in home prices during the forecast period. In general, declines in GDP and elevated unemployment level will result in higher expected losses while improvements in home prices results in lower expected losses for those portfolio segments using those loss drivers. The Company also added additional qualitative factors on its construction and development, residential real estate, commercial real estate and hotel portfolios based principally on risk rating migrations, level of deferrals in the portfolio, expected collateral values and model risk uncertainty.

During the year ended December 31, 2020, the Company sold $87.5 million of selected hotel loans from its commercial real estate portfolio. This sale resulted in charge offs of $17.2 million and a loss on sale of loans of $386,000. The Company designated a portfolio of consumer installment loans, totaling $165.9 million at December 31, 2020, as held for sale during the third and fourth quarters of 2020. The transfer to held for sale resulted in $1.6 million in charge offs and a provision release of approximately $6.7 million.

The following table details activity in the allowance for credit losses by portfolio segment for the periods indicated. Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories.

(dollars in thousands)	Commercial, Financial and Agricultural		Consumer Installment		Indirect Automobile		Mortgage Warehouse		Municipal		Premium Finance
Balance, December 31, 2019	$	4,567	$	3,784	$	—	$	640	$	484	$	2,550
Adjustment to allowance for adoption of ASU 2016-13	2,587		8,012		4,109		463		(92)		4,471
Provision for loan losses	8,963		(3,831)		(235)		2,563		399		(198)
Loans charged off	(10,647)		(5,642)		(3,602)		—		—		(6,133)
Recoveries of loans previously charged off	1,889		1,753		1,657		—		—		3,189
Balance, December 31, 2020	$	7,359	$	4,076	$	1,929	$	3,666	$	791	$	3,879
	Real Estate – Construction and Development		Real Estate – Commercial and Farmland		Real Estate – Residential		Total
Balance, December 31, 2019	$	5,995	$	9,666	$	10,503	$	38,189
Adjustment to allowance for adoption of ASU 2016-13	12,248		27,073		19,790		78,661
Provision for loan losses	26,327		78,210		13,290		125,488
Loans charged off	(83)		(27,504)		(853)		(54,464)
Recoveries of loans previously charged off	817		1,449		794		11,548
Balance, December 31, 2020	$	45,304	$	88,894	$	43,524	$	199,422

Prior to the adoption of ASC 326 on January 1, 2020, the Company calculated the allowance for loan losses under the incurred loss methodology. The following tables are disclosures related to the allowance for loan losses in prior periods.

(dollars in thousands)	Commercial, Financial and Agricultural		Consumer Installment		Indirect Automobile		Mortgage Warehouse		Municipal		Premium Finance
Twelve months ended December 31, 2019
Balance, January 1, 2019	$	2,352	$	3,795	$	—	$	640	$	509	$	1,426
Provision for loan losses	3,837		4,268		1,459		—		(25)		2,721
Loans charged off	(3,460)		(5,899)		(1,904)		—		—		(4,351)
Recoveries of loans previously charged off	1,838		1,620		445		—		—		2,754
Balance, December 31, 2019	$	4,567	$	3,784	$	—	$	640	$	484	$	2,550
Period-end allocation:
Loans individually evaluated for impairment (1)	$	1,543	$	—	$	—	$	—	$	—	$	758
Loans collectively evaluated for impairment	3,024		3,784		—		640		484		1,792
Ending balance	$	4,567	$	3,784	$	—	$	640	$	484	$	2,550
Loans:
Individually evaluated for impairment (1)	$	8,032	$	—	$	—	$	—	$	—	$	6,768
Collectively evaluated for impairment	789,252		498,363		1,056,811		526,369		564,304		647,901
Acquired with deteriorated credit quality	4,887		214		5,013		—		—		—
Ending balance	$	802,171	$	498,577	$	1,061,824	$	526,369	$	564,304	$	654,669
	Real Estate – Construction and Development		Real Estate – Commercial and Farmland		Real Estate – Residential		Total
Twelve months ended December 31, 2019
Balance, January 1, 2019	$	4,210	$	9,659	$	6,228	$	28,819
Provision for loan losses	454		3,017		4,027		19,758
Loans charged off	(414)		(3,342)		(491)		(19,861)
Recoveries of loans previously charged off	1,745		332		739		9,473
Balance, December 31, 2019	$	5,995	$	9,666	$	10,503	$	38,189
Period-end allocation:
Loans individually evaluated for impairment (1)	$	204	$	953	$	3,704	$	7,162
Loans collectively evaluated for impairment	5,791		8,713		6,799		31,027
Ending balance	$	5,995	$	9,666	$	10,503	$	38,189
Loans:
Individually evaluated for impairment (1)	$	1,605	$	19,759	$	46,311	$	82,475
Collectively evaluated for impairment	1,532,786		4,256,397		2,737,095		12,609,278
Acquired with deteriorated credit quality	14,671		76,883		25,055		126,723
Ending balance	$	1,549,062	$	4,353,039	$	2,808,461	$	12,818,476

(1)At December 31, 2019, loans individually evaluated for impairment includes all nonaccrual loans greater than $100,000 and all troubled debt restructurings greater than $100,000, including all troubled debt restructurings and not only those currently classified as troubled debt restructurings.

(dollars in thousands)	Commercial, Financial and Agricultural		Consumer Installment		Indirect Automobile		Mortgage Warehouse		Municipal		Premium Finance
Twelve months ended December 31, 2018
Balance, January 1, 2018	$	2,693	$	1,926	$	—	$	640	$	519	$	819
Provision for loan losses	(117)		5,468		—		—		(10)		10,253
Loans charged off	(1,908)		(4,414)		—		—		—		(12,467)
Recoveries of loans previously charged off	1,684		815		—		—		—		2,821
Balance, December 31, 2018	$	2,352	$	3,795	$	—	$	640	$	509	$	1,426
Period-end allocation:
Loans individually evaluated for impairment (1)	$	191	$	—	$	—	$	—	$	—	$	379
Loans collectively evaluated for impairment	2,161		3,795		—		640		509		1,047
Ending balance	$	2,352	$	3,795	$	—	$	640	$	509	$	1,426
Loans:
Individually evaluated for impairment (1)	$	1,608	$	—	$	—	$	—	$	—	$	2,360
Collectively evaluated for impairment	676,923		482,390		—		360,922		597,945		408,021
Acquired with deteriorated credit quality	2,189		169		—		—		—		—
Ending balance	$	680,720	$	482,559	$	—	$	360,922	$	597,945	$	410,381
	Real Estate – Construction and Development		Real Estate – Commercial and Farmland		Real Estate – Residential		Total
Twelve months ended December 31, 2018
Balance, January 1, 2018	$	4,743	$	8,408	$	6,043	$	25,791
Provision for loan losses	(514)		855		732		16,667
Loans charged off	(731)		(356)		(1,255)		(21,131)
Recoveries of loans previously charged off	712		752		708		7,492
Balance, December 31, 2018	$	4,210	$	9,659	$	6,228	$	28,819
Period-end allocation:
Loans individually evaluated for impairment (1)	$	479	$	2,274	$	1,641	$	4,964
Loans collectively evaluated for impairment	3,731		7,385		4,587		23,855
Ending balance	$	4,210	$	9,659	$	6,228	$	28,819
Loans:
Individually evaluated for impairment (1)	$	6,935	$	17,231	$	25,759	$	53,893
Collectively evaluated for impairment	884,258		3,079,049		1,880,922		8,370,430
Acquired with deteriorated credit quality	7,904		56,108		21,221		87,591
Ending balance	$	899,097	$	3,152,388	$	1,927,902	$	8,511,914

(1)At December 31, 2018, loans individually evaluated for impairment includes all nonaccrual loans greater than $100,000 and all troubled debt restructurings greater than $100,000, including all troubled debt restructurings and not only those currently classified as troubled debt restructurings.